Capital type and bank financial strength
What is it about?
The trade-off between risk-based capital and non-risk-based capital in explaining bank performance continues to feature prominently in the bank literature. This study is another contribution to knowledge in determining the superiority of Basel capital over non-Basel capital. This is pioneer study in this direction in Nigeria.
Why is it important?
Although regulatory/risk-based capital is a global phenomenon, the findings of our study show the superiority of equity-to-assets (a non-risk-based capital) over other measures of bank capital in explaining bank financial performance. This accounts for why investors should not focus only on risk-based capital while analysing the performance of these banks. The need to incorporate non-risk-based capital into bank capital regulatory regime is also emphasised.
The following have contributed to this page: Mr Ahmad Bukola Uthman and Abdulai Agbaje Salami